AmEx loses antitrust lawsuit; merchants cheer

Washington, D.C. -- The Merchants Payments Coalition applauded U.S. District Judge Nicolas Garaufis’ ruling on Thursday that American Express credit card rules constitute an unlawful restraint on trade.



The judge found that the credit card giant violated U.S. antitrust laws by barring merchants from encouraging customers to use one credit card over another. In a 150-page opinion, he wrote that such a practice constitutes “an unlawful restraint on trade.”



The Merchants Payment Coalition issued a statement in which it said that the ruling “is one step forward to bringing badly needed competition and transparency to the entire credit card industry. Allowing retailers to ask consumers to use a less expensive card will result in lower prices for consumers and a fairer market for the fees merchants currently pay to accept credit and debit cards. Judge Garaufis got it exactly right that card networks charge merchants inflated prices that result in higher costs for consumers.”



The ruling was seen as a major blow to American Express, which argued that its policies kept it competitive against the larger payment networks Visa and MasterCard and their bank partners.



"Merchants across the country are thankful to the U.S. Department of Justice and to the judiciary for recognizing the anti-competitive nature of American Express’ rules and are hopeful that other steps will be taken to stop similar unfair practices of the other card companies who set outrageous fees behind closed doors for their real customers, the banks issuing the cards,” stated the Merchants Payments Coalition, whose member trade associations together represent almost 3 million stores with 50 million employees.



In a statement, American Express said it plans to appeal to ruling.



"The court's ruling will not provide any benefit to consumers and will, in fact, harm competition by further entrenching the two dominant networks," the company said.